Many people overlook assets when trying to settle their divorce cases. They don’t think to divide banked/accrued vacation time, overtime and sick time and these assets are commonly omitted from the negotiations. Most people are unaware that these accrued assets have a monetary value in their divorce, and they miss out on their share of these assets in their divorce cases, sometimes leaving a substantial amount of money “on the table”. Two wives of LAPD officers came to me from mediation, seeking a second opinion on whether the banked overtime and sick hours had value. The mediator told them that these hours were “worth nothing” and that they should just settle their cases and move on.
Mediators don’t have to be lawyers and don’t have to go to law school and don’t have to have legal malpractice insurance. And it’s a good thing, because on this point–the value of banked overtime, vacation and sick hours–the mediator was 100% incorrect. One of the women who consulted with me could have lost out on $79,000.00 ( yes, 79 THOUSAND) dollars for her community property share of these assets. Thankfully she decided to seek a second opinion!
In Suastez v. Plastic Dress Up Corp (1982) 31 Cal.3d 774, the California Supreme Court held that the right to paid vacation time constitutes deferred wages and it “vests” as it is earned by the employee. In Marriage of Moore (2014) 226 Cal.App.4th 92, the Third District Court of Appeals held that accrued benefits are a property interest that are divisible community property to the extent earned during marriage. It is error not to divide these benefits where the only thing preventing wife from receiving her share is husband’s decision to keep working according to the Court in Marriage of Gonzalez (1985) 168 CA3d 1021 at 1026 (banked overtime is deferred wage). All other employee benefits to the extent earned or accrued during marriage as a part of compensation is community property and are divisible upon dissolution, whether vested or not, per Marriage of Lehman (1998) 18 CA4th 169, 179-180. In re Marriage of Harrison (1986) 179 CA3d 1216, 1226 provides the same result re overtime. Further, if your spouse is a LA County Fireman or Police Officer, DROP benefits are divisible and there is an undisputed community property interest in the DROP program per Marriage of Davis (2004) 120 CA4th 1007.
The bottom line to this story is 2-fold. Don’t accidentally leave YOUR money on the table in your divorce case, and certainly make sure you have someone knowledgeable about the law working for you! It could cost you thousands of dollars! For more information or to schedule a consultation with Denise Lite, Certified Family Law Spcialist, call 877-317-8080. Your children and you deserve the very best.